How Bad Could it Be? Don’t Get Sick if Senate (Or House) Bill Becomes Law

Alaska Sen. Dan Sullivan speaking at a conference last year about the opioid crisis in Alaska. Critics say cuts to Medicaid will make it harder to find the resources to address the problem. (Photo via Sen. Sullivan’s web page.)

Guest Commentary

Published June 26, 2017

Mark Trahant / Trahant Reports

The Senate bill, like its House counterpart, has a simple message for Indian Country: Don’t get sick. Not in June. Not anytime soon. This bill is not about health care because it takes billions from Medicaid and passes on that savings to wealthy Americans.

How bad could it be? The official financial review from the Congressional Budget Office is expected early next week. The scoring of the similar House bill projected that by next year 14 million more people would be uninsured. And by 2026, an estimated 51 million people under age 65 would be uninsured. Under the House bill only a few million would use tax credits to purchase policies that even then would not cover major medical risks.

So the important takeaway from both the Senate bill and the House version is that it strips money away from Medicaid ($834 billion) and gives back most of those to high-income taxpayers ($664 billion). The Senate bill takes a little time to destroy Medicaid. It begins phasing out the expansion in 2021 and that will be completed by 2024. Then, like the House, Medicaid would become a state block grant program. The Republicans argue that this would control costs, slowing the growth of government spending. (Now Medicaid spending is automatic: If you are eligible, the money is there.)

Medicaid now accounts for about 20 percent of the budget in most Indian health system clinics and hospitals. And, more important, it’s a growing source of funding. It pays for medical procedures and for transportation to clinics. It’s the big ticket.

But Medicaid is also an odd duck. It’s officially a state-federal partnership so the federal government picks up most of the cost and sets some of the rules, while states get to determine other rules. Both the Senate and the House bills would let states do more (such as requiring patients to work) or what’s especially what’s covered by insurance.

This is particularly messy for Indian Country. Both the Senate and House bills recognize the Indian Health System as unique (and paid for by the federal government). So the legislation preserves the 100 percent federal funding through what’s called the Federal Medical Assistance Percentage for Medicaid or FMAP. And in theory both the Senate and House would keep in place federal rules for tribal members on some state requirements such as work rules. But the money would still flow from Washington to the states for administration. Messy (as it often is now). And the states that now have Medicaid expansion, through the Affordable Care Act would have to phase that out.

Mark Trahant

The biggest problem for Indian Country is that the Senate and House bills would destroy the framework of Medicaid. The bills move health care back to the states in a big way. That can be good or bad. California is debating how to create a single payer system. The Nevada legislature recently passed a Medicaid-for-all statute (where any citizen could buy into the program) only to have the law vetoed by the governor. But other states see health care only as a cost. The thinking goes that Medicaid is just another word for welfare and states should sharply reduce what is spent by government and let hospitals cover the cost of “charity” care.

Some numbers here. The American Hospital Association opposes both bills for one reason. In 1990 uncompensated care cost $12.1 billion or about 6 percent of total hospital expenses. By 2012 that figure reached $45.9 billion. And, after the Affordable Care Act, the total uncompensated care costs dropped to $35.7 billion or 4.2 percent of total hospital expenses, the lowest level in 26 years.

But this shows the futility of cutting Medicaid and insurance programs for the poor. It doesn’t save money, it just shifts it around. People who get sick will go to emergency rooms when it’s later in their illness and more expensive. So hospitals will cost more for everybody. (But at least the wealthy get their tax break, right?)

The opioid crisis is an example of that. The costs will not go away. Some money will be found by states, cities and tribes. The Senate bill adds a funding stream of $45 billion over 10 years for substance abuse treatment and prevention that’s now funded by the Affordable Care Act. But Medicaid expansion has been a key funding source. The Associated Press reports that Medicaid expansion accounted for 61 percent of total Medicaid spending on substance abuse treatment in Kentucky, 56 percent in Michigan, and 43 percent in Ohio.

The Senate has only a few days to consider their version of health care “reform.” Already a few conservatives are saying the bill doesn’t go far enough and want more changes. This is the script the House used: The conservatives throw a fit, get their way, and then the so-called moderates give in and vote yes anyway.

My bet is that Senate leaders have already written off Alaska Sen. Lisa Murkowski and Maine Sen. Susan Collins because of their past support for Planned Parenthood (there are already restrictions against the federal funding of abortion, but the Senate bill says Planned Parenthood cannot bill Medicaid for a year for all women’s health services). So I think Senate Majority Leader Mitch McConnell is banking on a fifty-fifty split with Vice President Mike Pence casting the deciding vote.

That means the moderate senators, those that support Medicaid in their states, can say what ever they want now. But it’s their vote that will count. Destroy Medicaid or cut taxes? That’s the choice for these four: Rob Portman of Ohio, Shelley Moore Capito, West Virginia, Dean Heller of Nevada, and Cory Gardner from Colorado. Perhaps it’s wishful thinking but I will add Alaska Sen. Dan Sullivan to this list because Alaska will be hit particularly hard by the overall legislation, the opioid epidemic, the state’s successful expansion of Medicaid, and its impact on the Alaska Native Medical system. Sullivan said on Facebook that he will read every word of the bill and he wants “a sustainable and equitable path forward for Medicaid” and he won’t vote for a bill that makes things worse for Alaskans. So will it be his party or Alaskans? Health care or tax cuts?

And, since I am asking already asking questions, will the Senate bill pass next week? Remember it will only take one senator to force the Senate to start over.